Limited Liability Partnership (LLP)

Advantage of LLP Registration

• The partners and the LLP are considered different legal entities in the perspective of the law since LLPs are recognized as such.
• No minimum capital is needed to launch a limited liability partnership.
• Limited Liability Companies can be formed with as little as two members, whereas LLPs can have an unlimited number of partners.
• In India, an audit of an LLP is only necessary if the contribution or yearly turnover reaches Rs. 25 lakhs.
• Compared to other business forms, the LLP's organizational structure is simpler and more adaptable to administer.
• The Minimum Alternative Tax and Dividend Distribution Tax are not applicable to LLPs, making it an additional benefit.
• Since it has distinct legal status in the eyes of the law, a llp can possess property in India.

Features of LLP

• It has a separate legal entity, much like businesses do.
• For an LLP to be established, a minimum of two people must join forces as partners.
• The maximum number of partners is limitless.
• A minimum of two partners must be chosen.
• A resident of India must be at least one of the authorized partners.
• Each partner's duty is just for the amount of their contribution.
• An LLP can be formed for a nominal fee.
• Less rules and compliance.
• No minimum capital contribution is necessary.

Features of LLP

Penalty for failure to comply

The amount of compliance an LLP must adhere to is small. However, the LLP would face significant fines if these compliances are not finished on time. The LLP must submit yearly returns to the Ministry of Corporate Affairs (MCA) even if there is no activity throughout the year. If the returns are not filed, the LLP will be hit with a large fine.

LLP winding up and dissolved

An LLP requires a minimum of two partners. If the requisite two partners are absent for a continuous six-month period, the LLP will be dissolved. The LLP may be dissolved if it is unable to pay its debts.

Difficulty in raising money

The LLP does not have shareholders or the idea of equity like a business. Venture capitalists and angel investors are not permitted to become shareholders in the LLP. This is due to the need that the shareholders join the LLP as partners and assume all partner duties. Thus, it is challenging for LLPs to raise cash since angel investors and venture capitalists prefer to invest in companies rather than LLPs.

Benefits of Registering as an LLP

Registering a company as a Limited Liability Partnership (LLP) has various advantages:

• Limited accountability: In an LLP, the partners are protected from personal accountability for the debts and obligations of the company by the concept of limited liability. In the event that the company suffers losses or issued, this safeguards their personal assets.
• Separate Legal Entity: Because an LLP is a separate legal entity from its partners, it is able to contract, own property, and bring or receive legal action on its own behalf.
• A limited liability partnership (LLP) is said to have continuous existence if one or more of its partners quit the company or pass away. This gives the company stability and guarantees business continuation.
• Flexibility in Management: An LLP allows for flexible management since partners may select how the company will be run and what each partner's duties will be. In accordance with the agreement, they may also appoint new partners or dismiss current ones.
• Lower Compliance Burden: An LLP is simpler to manage and run since it has less compliance obligations than a private limited company.
• Tax Advantages: Because an LLP is taxed as a partnership, the income is subject to the individual tax rate of each member. The partners may have to pay less tax as a consequence.
• Credibility: Becoming an LLP increases a company's credibility and makes it simpler for it to get loans or credit from banks and other financial organizations.

Overall, being an LLP has various advantages for both the partners and the company, making it a desirable choice for small and medium-sized businesses.

Documents Required for LLP Registration

A. Partners' Documents

• Partners' PAN cardsor other forms of identification must be presented while forming an LLP. The primary form of identification is the PAN card.
• Partners' address proofsmight be in the form of an Aadhar card, voter ID, passport, driver's license, or passport. The name and other information on the PAN card and the address proof must match perfectly. Before submitting to RoC, the spelling of one's own name, the name of one's father, or one's birthdates should be rectified if it differs between the address proof and PAN card.
• Residence Evidence for Partners:Recent bank statements, phone bills, cell phone bills, energy bills, or gas bills should be provided. The name of the partner as it appears on the PAN card must be included on a bill or statement that is no more than two to three months old.
• Photo -Partners should also provide a passport-size photo of themselves, preferably against a white backdrop.
• In the case of foreign nationals or NRIs, a passport foreign citizens and NRIs must present theirpassportsin order to become partners in an Indian LLP.

Foreign citizens and NRIs must have their passports notarized or apostil led by the appropriate authorities in their home countries before the Indian Embassy may sign the paperwork on their behalf.

B. Documents of LLP

• Proof of Registered Office Address:Within 30 days of incorporation or during registration, proof of registered office must be provided.
• A rent agreement and a landlord's no-objection certificate must be provided if the registered office is taken on rent. The landlord's permission for the LLP to use the location as a "registered office" will be expressed in a "no objection" certificate.
• Additionally, one utility bill, such as a gas, electric, or phone bill, must be presented. The bill must contain the entire address of the property, the owner's name, and be no older than two months.
• Certification for Digital Signatures:Since the authorized signatory will digitally sign all papers and applications, one of the chosen partners must also choose to get a digital signature certificate.

Checklist for LLP Registration

• Two partners, at least.
• All recognized partners are DSC.
• All specified partners' DPINs.
• Name of the LLP, which is distinct from any trademark or other LLP already in use.
• Capital investment made by the LLP's partners.
• Between-partners LLP agreement.
• Evidence of the LLP's registered office.

Procedure for Registering an LLP

A number of crucial processes are involved in the incorporation of an LLP. Here is a thorough guide to setting up your LLP:

You can acquire a Digital Signature Certificate (DSC).
Since digital signatures are required for all official filings, the LLP's prospective partners are all required to get a Digital Signature Certificate (DSC).

Discover your Director Identification Number (DIN)
Partners who don't already have one must apply. A distinctive identifying number called the Director identifying Number (DIN) is given to anyone who wants to run LLPs or be named partners.

Decide on a name for the LLP.
According to the recommendations of the Ministry of Corporate Affairs, choose a distinctive and appropriate name for your LLP.

LLP Incorporation Form
The partners proposed LLP, LLP agreement, and registered office address are all requested on this form. It also contains a declaration from the partners stating their agreement to serve as designated partners and adhere to LLP rules.

LLP Agreement
Create the LLP Agreement by detailing the rights, liabilities, and duties of the partners. Within 30 days following establishment, this agreement must be notarized and submitted to the Ministry of Corporate Affairs.

Obtain an incorporation certificate.
The Registrar of Companies (RoC) will issue the Certificate of Incorporation, formally acknowledging the LLP's existence, following the filing and verification of all necessary paperwork.

Obtain a PAN and TAN.
Apply for the Permanent Account Number (PAN) and TAN for the LLP after receiving the Certificate of Incorporation.
By carefully following these instructions, you may successfully register your LLP and begin your entrepreneurial endeavor.

Legalstartup Makes Easy LLP Registration Possible

Legalstartup is your dependable travel partner while you complete the LLP registration process. This is how we can help you:

• Professionals with experience:Our knowledgeable staff is familiar with all aspects of LLP registration. We'll provide you precise information and make sure you understand each step.
• Name Availability:We'll assist you in finding out if the LLP name you want is available and reserving it in accordance with the regulations.
• DSCs and DINs:We'll help you obtain the Director Identification Numbers (DINs) and Digital Signature Certificates (DSCs) required for the procedure.
• LLP Agreement:To ensure that the LLP Agreement is legally solid, our specialists will assist in its writing. We'll also be able to properly and legally file the necessary paperwork with the appropriate authorities.
• The application procedure for your LLP'sPermanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) will be made simpler by our team.
• Customer service:We are available to you. Your inquiries will be answered by our customer service, guaranteeing a smooth voyage.
• You will receivefrequent updateson the status of your LLP registration, keeping you informed at every stage.

You may safely handle LLP registration with Legalstartup as your partner, assisted by knowledgeable experts who will guarantee a hassle-free journey from start to finish.